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tv   Bloomberg Markets Americas  Bloomberg  July 10, 2018 1:00pm-3:30pm EDT

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of the longtime district court judge. understandvanagh that in the united states of america judges are not unelected super legislators whom we select for their personal views or policy preferences. kavanaghecting judge president trump said he -- did exactly what he said he would do on the campaign trail. nominate someone who will overturn women's reproductive rights and strike down health care protections for millions of americans. >> senator schumer said he also plans to oppose kavanagh with everything i've got a drama that lasted more than two weeks and had the world riveted is over in thailand and they are all safe. ty navy seals say all 12 members of the soccer team and the coach have been rescued from the flooded cave. an international team of divers brought out the coach and the last four boys today.
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a political watchdog group is calling for an ethics review of jim jordan. several wrestlers with the jordan kneweam say they were being sexually abused by a team doctor. he maintains he was unaware of the abuse. global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. vonnie: i'm vonnie quinn. shery: i'm shery ahn. welcome to bloomberg markets. vonnie: here are the top stories
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on the bloomberg and from around the world. backseatsions taking a and earnings season takes the wheel. u.s. stocks continue on their winning streak for a fourth straight day. cars -- cards. jonathan miller joins with details. and paving the way for succession. a promotion for morgan's danley's head pick could put him in line as possible successor to the ceo. minutes.in the next 30 abigail doolittle is here to tell us about the trading day that we are halfway through. gains simply continue. for the doubt the best four days since the middle of february. the big rebound from all the bearish volatility at the middle of february.
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each of the major averages now up seven of the last eight sessions. you will notice the nasdaq higher tech index down .5%. over the last eight days the index has really had quite a ride. biogen trading up 20% on strong alzheimer's drug data. the biotech index having its best seven days since the election back in 2016. let's take a look at a few of the movers. .here's biogen down 3.5% today the alzheimer's data released last week is pretty ambiguous weighing on some of the other names as well. strength big source of for both the nasdaq and the s&p 500. here's an intraday chart at the highs. best day since 2009. right now up 3.9% on pace for it
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best day since 2011. they beat earnings estimates by 5.8%. againes in line and once snacks driving the growth and finally some other top movers for the s&p 500. we are taking a look at southern company as we have barclays initiating with an overweight. that's a utility company. as we havearly 2% wells fargo positive on executive changes that will really sustain perhaps a long-term turnaround and then finally quest diagnostics up 1.8% raise to an outperform at ever for isi with analysts saying that lab stocks are a haven in these times of uncertainty. a pretty interesting call. vonnie: abigail doolittle, thank you. shery: wall street kicks earnings season into high gear with reports from citigroup,
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wells fargo, jpmorgan and pianist the financials. nick.g us now is brian will earnings offset the downside risks of a trade war? >> that seems to be the pattern this year. during this vacuum period where stocks have been struggling to find some legs. we saw the optimism related to corporate profits, corporate guidance really pick up the rally where it has been faltering when trade was the dominant theme in the headlines. coming into this earnings season expectations are already pretty high. were revised up for the current quarter during the time period. there is less of a low bar to clear. vonnie: we are looking for a 9% revenue growth number. where does that come from? >> consumer spending was that strong in the united states
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during the quarter. coming from overseas despite seeing somewhat softer growth in the eurozone we are still talking about much stronger demand than we were getting one or two years ago. pretty good comps on the dollar year-over-year. that could also be contributing to the revenues. shery: it was interesting to see the couple of trading sessions. why are we seeing this trend which was reversing them what we are earlier and is going to continue? sectors are on the opposite end of the spectrum when it comes to interest rate sensitivity. the rising environment should be good for financials. we like to see a steeper yield curve not just a higher yield curve.
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much rather be in financials right now and utilities. suddenly there is nothing going on in treasuries. we are holding it around the 30 basis point mark. >> basically where we were at the end of february on the 10 year. it has got a lot of investors pretty alarmed. when i speak to individual investors who might not be well-versed in economics i'm starting to get questions about the shape of the yield curve. if you know one indicator about the economy in know that when the yield curve is flatter it's not a great song -- sign. the yield curve is also flattering -- flattening a lot more slowly. we think it will continue to do so. we will get the message with slightly higher interest rate. vonnie: what about lower down the credit spectrum? have been playing this intra-credit trade between
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emerging markets and high-yield seeing are increasingly better opportunities for the same rate in credits for the emerging markets whether they are sovereign or corporate versus the similarly rated credit in the united states. a lot of that is because of the risk coming from china related to the trade wars. e.m. has just been downgraded as a whole. we think it's probably time to get back into emerging market credit. does it so much more responsive and sensitive to monetary policy. >> that's true if you are talking about dollar denominated debt. that's an opportunity to pick up less interest rate sensitivity but still a pretty good spread when you compare to a high-yield bond. these credits -- were actually if anything
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getting a bit more defensive and a lot of our core fixed income portfolios. there's going to be places we still want to take risks. u.s. high-yield we still like. we just like emerging markets of it that are at the moment. if anything the pattern has been despite the fact that we are still risk on in the fixed income side we have been looking for opportunities to intelligently de-risk portfolios. perhaps take on less credit sensitivity. value which one do you prefer? >> very close call. we are still very overweight cyclicals. choosing financials over consumer discretionary tech we are not ready to make that move yet but we do like all those sectors. shery: thank you, brian nick.
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how buyers are working the manhattan real estate market. this is bloomberg. ♪
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shery: this is bloomberg markets . i'm shery ahn. vonnie: i'm vonnie quinn. manhattan home buyers are reveling in inventory. prices fell 17% in the second
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quarter and more than half of sales went for less than the asking price. let's bring in jonathan miller. what's going on? why so much inventory and why is the buyer now in control? >> this has been brewing for three or four quarters. the finishing touch was the uncertainty overlay caused by becausefederal tax law there's going to be ramifications over the next year or two as people are really limited in terms of how much they can deduct with a $10,000 cap on property taxes. local in a very high taxed region is going to provide a challenge. the slowdown in sales really represents buyers and sellers sort of doing this recalibration of what value actually is without a lot of information to go on. shery: i have had friends suffered a loss in that capped reduction -- caps on deduction.
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>> we are seeing new development inventory. we have had excess supply for several years. market is really the highest level of inventory we have had in about eight years for second quarter so it's unusual. what that's going to do is soften prices as you go forward. shery: which is why you get the previously owned manhattan apartments at the biggest discounts of their asking price in five years. talk to us about median prices and geographies as well. where are the hotspots in manhattan? >> the median prices off from last year's record. it's about $1.1 million. -- it's of hotspots more in terms of price points.
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so this is a market that for several years has been softer at the top and tighter as you move lower in price so in market areas with a lot of smaller still tight. about 9% of the transactions market wide in manhattan go to war.ng board -- bidding there is still some tightness but it is more located towards the starter markets so to speak. shery: where do you find the best bargains? >> i think at least right now that is all playing out. you are seeing the slowdown in activity. sales activity is not slow. it is just slower than it has in over the last couple's peers. i think writers and sellers have
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to work this out and it's going to take a year or two of price discovery. you have rising mortgage rates. a little over half of the sales in manhattan more cash. 54% were cash last quarter. it is not dominating the market and sales actually began following earlier last year for rate started to rise. mortgage rates aren't the true reason for the slow down. i think it has a lot more to do with affordability. vonnie: tell us about the ultraluxury slice of the market. the marketalk about north of $10 million which really represents a few percentage points of the market. that's the optics that the world looks at through manhattan. we have actually and 2017 had a lot of activity at the high-end except they generally were sales that have been overpriced to begin with.
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we would see a $50 million sale. they have been on the market for five or six years and then for a 35% discount. that luxury market is strong. it's the sellers have over the last couple of years become much more connected with the market and pricing correctly. shery: given the ongoing trade war with china and the investment can and the trump administration they are going to studentmiting those thesis to chinese people. this that going to have an impact on the market? >> i think the impact already started. over the last year or two we have seen a much lower level of international wire participation than we had three or four years ago and a lot of that was a currency play the dollar.
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i think this year it looks like there's even less participation even before those actions are taken. i wouldn't look to the international market in terms of being a large source of demand for the market to that disproportionately impacts new development. vonnie: tell us about the renter these days. is the renter still in control as well? >> oh yes. we have had three years according to our main numbers consistently where landlord concessions in terms of their footprint over the market has been expanding. words rents themselves we call face rents which before you start factoring in all the givebacks by the , continuing -- continuing to see those tenants to offer vacancy low. it is working but it is more of
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a slow grind than it is a sharp correction. vonnie: it is strange. it's not like there are people leaving manhattan. >> it is very bifurcated. most of the development product has been skewed in the lower half of the market which is line share of the job creation -- the higher end softens. think of rental market as like a layer cake where the high-end is into the nextts layer and you have an older building competing with a aand-new building that has rock wall and although sorts of things. it affects all levels. not just the high-end. vonnie: i always did like the icing on the cake. shery: time for the bloomberg
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business flash. tramp for martin sorrell over his former employee -- employer wpp. out his almaeat mater in the race to acquire a dutch-based digital production firm. it will pay $352 million in shares and cash. the acquisition allows him to begin rebuilding his reputation after an unceremonious exit from wpp last april. -- the biggest money manager in the country. td bank has agreed to buy greystone manage investment for $603 million in stock and cash. the proposed transaction which is expected to close later this year will bring total assets under management at td bank to about $300 million. greystone shareholders will receive 30% of the purchase price in td shares.
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-- athe end of an era as real madrid for cristiano ronaldo. he is leaving the spanish ball club to join italian champions. he is real madrid's all-time leading scorer and spent nine years on the team. he leaves the club after leading them to four champion league titles. that's your business flash update. a move that morgan stanley would see how promotions at the bank affect the possible successor to ceo james gorman. this is bloomberg. ♪
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bloombergis is markets. i'm vonnie. shery: i'm shery ahn. morgan even though stanley ceo has indicated he plans to stay on several more years he has been moving senior
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executives in an effort to groom his successor. joining us to discuss the details is shown alibaba suck. what caught your eye? >> ted paik is 49 years old. age matters here. it's a succession plan we are talking about at morgan stanley. he's a rising star. he helped lead it into the shocks -- equity stocks globally. he moved over to run bond trading and now he's running all of ranking and trading operations. frank peddie have go who has been long time in london overseeing european investment banking operations and was cohead of the investment bank. vonnie: it's fascinating. there's always two. it's like a race or a wrestling match. is that the case? there is two that were very
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clearly moved around significantly in this latest transition. -- rendition. now we the top right have andy saperstein who helped code lead. the thing that's interesting about morgan stanley is there's a pretty deep bench all around that today is definitely pick status shine. shery: we have one of the highest ranking female executives on wall street. >> very exciting. 2012 lead m&a in the americas. morgan stanley is actually number one above jpmorgan and now she's taking the position is head of the investment bank. wante: all of these people this. everyone wants to run morgan stanley. dealere has been a great
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of elevation. a lot of people were brought up at the same time today. vonnie: it seems a little early. it is james gorman really thinking about leaving anytime soon? >> it is early. nothing said he was stepping down. he said he would stay on for several more years. at his annual meeting some of the got up and called him the lebron of wall street. he's on a high note right now. things to beitely done. we talked about the asset manager a lot. the wealth manager is quickly rising. vonnie: wonderful story. thank you. coming up, president trump has some harsh words for nato. this is bloomberg. ♪
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mark: i'm mark crumpton with first word news. mike pompeo today met with the abu dhabi crown prince. the u.s. and its gulf arab allies want to show
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iran that its actions have "a real high cost." secretary pompeo has stepped up his warnings that tehran threatened to disrupt mideast oil supplies. her newmay met with cabinet as she tries to restore government unity following three unexpected resignations over brexit, including two from her top ministers. --is johnson and jeremy hunt boris johnson will be replaced by jeremy hunt. at a time ofal job massive importance for our country is to stand with the prime and its are so we can get through an agreement with the european union. part of that is a strong, constant britain, global britain. mark: he also thanked his predecessor, calling boris
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johnson one of the great driving forces in british politics. a federal judge told prosecutors he wants an update next month on the sentencing status of president trump's former national security adviser, michael flynn. flynn has admitted to lying to the fbi about context with the russian minister. he is still cooperating with the ongoing investigation. allowed to buys a gun against his mental health cruz wass -- lydia called an enabler. cruz killed 17 people at marjory stoneman douglas high school three months after his mother died. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg.
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shery: live from bloomberg world headquarters in new york, i'm shery ahn. >> i'm in for amanda lang. welcome to "bloomberg markets." shery: here are the top stories we are following from around the world. setting the stage for nato, president trump has to brussels after saying that meeting with russian president putin will be easier than meeting theresa may. watch out, wework. we speak to the ceo of its rival about his company's expansion plan. from silicon valley to shanghai, tesla plans to build a plant in china that will rival its u.s. factory. let's get a check of the major averages.
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we are seeing u.s. stocks offer session highs, but still in the green. the dow gaining .4% while the s&p 500 is maintaining its longest winning streak since june. most sectors in the green. the nasdaq off at session highs and declining at the moment, but after three sessions of gains. the key theme today will potentially be earning season, which is underway with fewer trade war headlines rattling the market, it's all about earnings. you can see that pepsico jumped after reporting better than forecast profit. throughout the rest of the week, we have jpmorgan and wells fargo among the largest companies giving out results. there's a lot of optimism about the earnings picture. we have solid jobs data, fiscal stimulus -- this chart showing you that there could be recession risk.
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premiums on the lower graded investment-grade corporate bonds have risen to 2%. that happened during or before six of the past seven recessions. optimism out there for earnings, but still a tone of caution. jon: absolutely. when you look at what the expectations are, we've maybe got a good indication from pepsico with their quarterly result, there are big expectations for profitability to shine through in this quarter. we can look at current expectations when it comes to the second-quarter earnings growth. when you add it all together, we are looking at 20% growth. is that the kind of number that could offset those uncertainties? you have to look at the market dynamics today. the dow is outperforming the s&p and nasdaq. the dow struggled against the nasdaq this year because of trade uncertainty, stocks like
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caterpillar and 3m have lacked the market in recent months. now, some signs based on the moving averages that the dow is seeing some momentum. whether that story will continue is driven by what happens in earning season. the u.s.'s nato allies bracing for president trump's return. the president already throwing verbal bombs. begins --f meetings to get defense spending up to 2% of their gdp. something only the u.s. and for other countries have managed to do. for more, we are joined by bill faries in washington and annmarie hordern joining by phone from brussels. us, what wee for should be watching for. normally, these are
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historically ritual meetings, but this one is going to be contentious. trump hasn't set foot in brussels and already, is european partners are anxious and worried. he is speaking glowingly about ofdimir putin over the likes theresa may and others. he was asked what he thinks about his trip to europe. what this comes down to for trump is spending. he tweeted about this 30 minutes ago, saying his nato members are delinquent on payments. he wants them to get in line with what they agreed to in 2004. greece, u.k., estonia and poland are the only ones up to that mark. he's not even here yet and he's already pressing on it. it also comes on the heels of him in the past calling the group obsolete.
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and recently saying it was just as bad a deal as nafta. tellingnnmarie hordern us about that 2% goal. where does that number come from ? that is a level of funding for defense spending that has been long agreed to by the members of nato. it was in 2014, there was frustration about european defense spending at the time. the countries not at the 2% threshold put together a plan to get there by the middle of the next decade. president trump has been impatient with that timetable. he wants to see more countries get to 2% much more quickly. he sometimes seems to treat it as if it's a fund that countries contribute to. it's just a measure of how much defense spending may have relative to the size of their economy. likentinues to say things
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countries should be reimbursing the u.s. for paying more than its fair share. that is something that will be top of his agenda throughout the two days or so in brussels. it is something that european leaders are dreading to some degree. jon: we obviously saw all the brexit development over the last few days. how does that factor into all of this? the president implying he thinks his meeting with putin is ultimately easier than his meeting with theresa may. expect this -- there's a petition in the u.k. to stop president trump from visiting. there are protests outside major key landmarks in london, including a blimp of president trump as a baby. may and thenwith go meet with vladimir putin.
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putin are at odds over the attack in march. it is a very tense situation. he thinks it's going to be easier with putin than may. all theworrying european allies. they had to move a lot of events outside of london due to the fact that many londoners were protesting his visit completely. shery: it's not only about defense spending. it's also been about climate change, protectionism, middle east policy. tell us about the state of u.s. and europe relations. bill: there's a lot of complications at this point. you mentioned the climate change treaty, which is backed by all the european countries and not back at all by the trump administration. there's been some frustration about the stalemate in syria.
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the u.s. state department has been critical of russia's role in southern syria, saying it has not abided by some agreements there. the nato defense spending issue will likely be the top issue on president trump's agenda. it's hard to see how any kind of resolution is reached. it's hard to quickly ramp up spending on defense in any country, especially countries that are having political challenges internally where there's not a lot of support for these efforts. it's hard to see what the positive scenario is out of nato. on the other hand, the nato alliance is quite nervous about what the president may agree to during his one-on-one meeting with president putin. bill faries in washington and annmarie hordern joining us from brussels. coming up, watch out, wework. convene is looking for a fresh
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round of investment. we will speak to its ceo, ryan simonetti, next. this is bloomberg. ♪
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shery: this is "bloomberg markets." i'm shery ahn in new york. of. --m in front toronto. shery: wework is getting competition. has been valued at more than $500 million. they just got a fresh round of investment. the start of just raised $152 million and is looking to grow -- the startup just raised $152 million and is looking to grow.
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we are joined by the founder and ceo, ryan simonetti. thank you for being here. i note your next city target will be london. that will be your sixth city. given the mess with brexit right now, is that a concern to you? ryan: it's interesting, when you look at the problem we are solving, it's how do companies make their real estate strategy more agile? in times of uncertainty, it makes more sense for organizations to think about or chelsea -- outsourcing instead of in sourcing. 50% of our revenue comes from enterprise companies with over $1 billion in revenue. we asked them where they want us to be next. london has been on that list for the last eight years. the time is now. jon: that's a really fascinating stat. when people think of businesses like yours catering to startups,
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it sounds like in your case, you are as much targeting traditional businesses just thinking differently about office space. ryan: it's more than just office space. it's thinking about the entire workplace experience. we know from talking to every , it isthe country today a focus on talent. the workplace is a tool that companies can attract or retain and ultimately inspire that talent. since the day we founded the company, we've been focused on enterprise. there's a reason that makes up a large percentage of our total revenue. shery: when do you plan on joining your landlord partners and wework in making this purchases? we've been approached by our partners to expand what we butdoing into property, that's not on the strategic agenda for the next 12-24 months. our focus with this capital is
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to expand and grow. we want to expand our physical network. for our enterprise companies, there is value in having global distribution. we are continuing to evolve our hospitality platform to meet the needs of our customers and landlord partners who are under pressure to differentiate their building to do more for tenants to attract them to their buildings. launchportantly, we will a workplace technology platform later this summer called elevate. shery: is that going to be what differentiates you from wework as well? how do you get the competitive edge there? ryan: one is the customer base. we are more than a co-working company. we are thinking holistic we about the workplace experience and how we partner with the most prominent building owners in the world to create meeting and workplace experiences that are truly differentiated. and partnership philosophy
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how closely we are working with them is a big difference. co-working is a part of what we are doing, but we are much more than that. jon: when it comes to the investors in your business, ryan, there seems to be common ground with real estate developers. is that going to continue? those will be the kinds of investors helping to fund your business? ryan: as i mentioned, what differentiates us is this partnership approach. some partners invested in real if youand hotels -- what ran an office building like a lifestyle hotel? our focus has been on partnering directly with building owners of class a buildings to help them reimagine what the experience of the building can be like for the entire tenant base. we are partnering with them and allowing them to invest in the company so that we are aligned in our shared success. jon: you talked about the london market.
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give us a sense of other cities on your radar for the foreseeable future. ryan: if you look at our customers, these are companies that have a global presence. our strategy, is more places, more ways. our focus has been u.s. expansion. we are now in five cities. chicago will be our sixth later this year. the first international market will be london. every global city where our are markets we ultimately have to be in. we are excited to leverage this capital to pursue our global growth plans. jon: thank you for joining us today, ryan simonetti, founder and ceo of convene. helping startups get a leg up when it comes to flexible workspaces. i understand start up fever is gripping toronto. this district houses companies
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like airbnb, they are scouting for more space. the tech incubator housing 150 tenants and 6000 workers. two thirds of those spots used by startups. what is sparking this startup craze in toronto? jon: i don't think it's the drake affect. this has to do with homegrown companies like shop i continuing to grow. they are looking to build their business. you talked about wework. there's a fast-growing unicorn style business looking to build their presence in toronto. microsoft continues to hire and build up their presence. all those factors are coming together to change the story on startups. shery: it's interesting to see that develop. jon: absolutely. we will stay on the technology theme. fromwe come back, moving
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silicon valley to shanghai. tesla's next big steps overseas. this is bloomberg. ♪
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jon: this is "bloomberg markets ." tesla taking its biggest step yet to expand overseas. the company signing a prillaman area agreement with china to build a factory that will rival current u.s. production. the chinese plant will have the capacity of 500,000 vehicles a year. running us from san francisco, dana hull. -- joining us from san francisco, dana hull. they are finally reaching that 500,000 goal.
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dana: it will take them a couple of years to ramp up to this. what was introduced today was a plenary -- pulmonary deal -- preliminary deal. how much will this cost? jon: i get the feeling that if elon musk had a few hours to kill, he wouldn't spend that time watching netflix. he has a lot going on right now. where does this china story fit in the priority list of tesla? dana: tesla has global ambitions and china is the world's largest car market. if you want to be a global automaker, you have to play in china. everything between the trade war and rules in china, you need to establish a manufacturing presence there to compete. it is very expensive to ship cars from california to china. this has been in the works for some time. musk has said that they wanted to have a gig a factory in china
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-- giga factory in china. how long will it take to get this up and running? pricestesla has lowered on some of their cars in china. how are they doing there? dana: it is hard for reporters in the u.s. to get accurate sales figures from china. if you look at the securities filings, china is there second-largest market after the u.s. the third is norway. there's big appetite for the model x in particular. there is considerable demand for the vehicles. there's a lot of competition as well. say there'sair to additional pressure to get things going because of the trade battle between china and the u.s. right now? dana: the trade battle is a backdrop. tesla has been talking to china about a possible factory since
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long before the presidential election in the u.s. they've been scouring locations for months. the timing is all happening with the geopolitics in the background, making the timing more interesting. maybe there's more pressure to get it done. this is something teslas been working on for some time. shery: will there be more in the works in terms of building overseas after china? musk has musk has said that fi, they want to do a factory in china. looking at a third factory in europe, possibly germany. there's no indication that they've made much progress on that front. setting the stage for big ambitions for tesla. jonshery: the department of juse saying 38 of the 102 kids under age five will be reunited with
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their families after they were forced to be separated at the border on president trump's zero-tolerance policy. the policy resulted in some executive order back tracking the effort. the court issued an order last month and set the deadline of today to reunite those 102. children we are now hearing that -- those 102 children. we are now hearing that only 38 will be reunited with their families. this has come after nationwide public outcry over president trump's zero-tolerance family separation policy. this is bloomberg. ♪
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scarlet: it is 2:00 p.m. in new york and 7:00 p.m. in london. i'm scarlet fu. julie: i'm julie hyman. welcome to "bloomberg markets."
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scarlet: we are live in new york over the next hour. here are the top stories around the world. musk's big bet. tesla signs a deal in shanghai to build a factory that can turn out 500,000 vehicles a year eventually. pepsico pops on a strong earnings beat. consumers may be ditching sugary soda but are still reaching for big bags of chips. president trump taps brett kavanaugh for the supreme court, moving to create the most conservative bench in a generation. let's get a check on where stocks are trading right now with abigail. the dow and s&p extending yesterday's advance. abigail: at this point, mixed action for the major averages. earlier, we had all three down. the nasdaq is now fractionally lower.
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the dow and s&p 500 up four days in a row. the first time that's happened in a month. each of the major averages, the dow and s&p 500 both up seven of the last eight sessions. .75%, itsl 2000 down worst day since june 27. that has been a play around the trade war, investors going to that more domestic based index. today, not so much. on the nasdaq, we see the gains earlier today, up for a fourth day in a row. taking a dip lower, not down big at all, a little more than .1%. biogen, big internet names weighing on the nasdaq at this point. facebook is the top drag on the nasdaq. ebay and netflix lower as well. with the exception of ebay, it
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doesn't appear to be on any news. netflix will be reporting it second quarter next monday. investors, analysts very positive about that. ebay has been downgraded to a hold at suntrust. citing the recent tax online decision -- on the long-term, that could weigh on ebay. another stock weighing on the nasdaq, shares of health care stock, lower all day long, down 4.7%. this comes on a downgrade at citing a business model shift and the possibility that big tech names could incrementally eat into the company's growth. the same analyst had been positive on quest diagnostics. while the nasdaq maybe year,onally lower, on a it is a different story.
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averages and the incremental averages very volatile on the year, flipping between gains and losses. now, the nasdaq in white leading the way, up 12%. the russell 2000 and purple right behind it. there in yellow on this trade war -- investors buying that news. it was less bad than some investors were thinking. julie: we will see how it evolves over time. mark: supreme court nominee brett kavanaugh today joined vice president pence and senate majority leader mitch mcconnell as kavanaugh made his rounds on capitol hill. mcconnell says while he expects democrats to grill kavanaugh on what decisions he might make in hypothetical cases, he
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discouraged them from doing so because he says it shows disregard for actual cases and disdain for the judicial process. the trump administration is moving forward with its plans to lift restrictions on u.s. coal emissions that were established under former president obama. the epa has sent a new rule to the white house for review. the agency says the limits put in place under the previous administration exceeded federal law by setting emissions standards that power plants could not reasonably meet. the nfl players association today filed a grievance challenging the league's national anthem policy. the new rule allows players to protest by staying in the locker room but for business from sitting or taking any -- forbids them from sitting or taking any on the sidelines. the rule ision says inconsistent with the collective bargaining agreement and infringes on players' rights.
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george clooney has been released from the hospital in italy after being involved in a motorcycle accident. was57-year-old clooney headed to a film set when his motorcycle struck by a car. -- was struck by a car. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. julie: president trump's push to reshape the supreme court has to capitol hill. justice brett kavanaugh's meeting with republican leaders today ahead of what's expected to be a bruising confirmation battle. chuck schumer issued this morning about the president's nominee. >> in selecting judge kavanaugh, president trump did exactly what he said he would do on the campaign trail. nominate someone who will overturn women's reproductive rights and strike down health
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care protections for millions of americans. julie: senator lisa murkowski just said she has to do due diligence on kavanaugh. we are joined by justin walker. he's currently an assistant professor of law at the university of louisville school of law. thank you for joining us to give your perspective on this. i'm curious how you would describe judge kavanagh's judicial philosophy. he's been described as a conservative. what does that mean with regards to the law? justin: judge kavanagh starts with the text of the law. he considers the text, the structure, the history, the precedent involved and he does it all in a fair-minded come independent way. i know this from personal experience.
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i saw him do this every day as a clerk where he didn't care whether the plaintiff or defendant won. he just wanted to figure out what does the law mean. scarlet: he's clearly very deliberative. one thing that has been made a lot of attention of, his evolution on thinking on whether a sitting president should be investigated. thought a0's, he sitting president should be subject to investigation -- he believes the president should be excused from the burdens of ordinary citizenship. he goes on to say such an outcome would ill serve the public interests, especially in times of financial or international secured a crisis. clarify for us where brett kavanaugh sees the role of congress here.
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is that the only institution able to hold the president criminally accountable while in office? justin: you mentioned the role of congress with regard to that article. what judge kavanaugh was saying there is not that a judge on the supreme court or any other court should weigh in this way or that way, he was saying that congress statutetatute -- pass a and the judges would be required to apply that statute as congress wrote. us about the kind of statute he might propose if he were proposing something to congress. he was writing that in a different capacity. that article was written in 2009 when president barack obama was president. it tells us something about how fair-minded and nonpartisan judge kavanaugh is.
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a republican appointed judge who is saying during a democratic presidency this is what i think and in the case of 2009, it would have been something that protected a democratic president. julie: if judge kavanaugh is confirmed, what kind of role do you think he will play on the court? the various justices tend to be the persuader in a particular case or build bridges or be uncompromising. what kind of character is he? what kind of role could he play? james: justin: we know from that hevanaugh's years can write in a persuasive way. he is a collegial, civil person. he served with 17 judges spanning the ideological spectrum. all 17 of those judges consider judge kavanaugh a friend, they
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respect judge kavanaugh and find him civil and collegial. that is the kind of judge he will be. scarlet: usurped as a law clerk to judge kavanaugh and anthony kennedy. -- you served as a law clerk to judge kavanaugh and anthony kennedy. does he fall to the right of justice kennedy? justin: he probably identifies thatas a textual contextual list -- a contextualist. they are very big family men. they are both so proud to be members of the bar, to be able to do their calling in this profession. from justice kennedy's perspective, i know that he's bursting with pride that his former clerk has been nominated. scarlet: our thanks to justin walker.
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thank you so much. up itsup, tesla driving investment outside the u.s. with plans for a factory in china that could build 500,000 vehicles per year. more on that story, next. this is bloomberg. ♪
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julie: this is "bloomberg markets." scarlet: tesla putting foreign investment in the fast lane, announcing plans for a factory in china. the goal is to build 500,000 electric vehicles a year in that factory within two eakin three years. we are joined by james albertine , consumer edge research senior auto analyst. -- within 2-3 years.
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they are looking to build annually within two or three years. does that sound feasible to you? james: thank you for having me. good afternoon. the timeline is probably not feasible. the spirit is they are not where they need to be in china. part of that is because they haven't partnered with a chinese manufacturer to this point. that is a gating factor to entry in the market. similar to what elon musk has done in the past, he has this punch list of items in his mind and he goes down them methodically to him and not as methodically to us from the outside looking in, this is more just laying the framework for h,e next 5-7-year pat similar to what he said with semi-trucks, which are still in development.
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, is still atto us the forefront of the path to profitability near-term. julie: according to data from lmc automotive, tesla sold 250,000 vehicles in china last year. let's say the ramp-up is slower than 500,000. let's say it's 20,000 or even 100,000, whatd -- is the demand there? james: that sub 15,000 with production not optimized for that market and no producing partners in that market, that is a pretty good number considering they are not trying as hard as others are to sell into that market. when you look at the broader demand for ev's, china is by far the biggest market right now. it makes a lot of sense. there's a lot of incentive is asian going on -- incentivize
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ation going on. they can direct consumers to ev's in a way that other developed markets can't. if they get production right, they have the demand to support ev's broadly. let's talk about cost here. tesla had $2.7 billion in cash in the first quarter. how much cost are you penciling in for this china plan? to what extent will tesla be able to stave off the need to raise capital or fund raise? james: the last point is the most important. i do believe they will raise capital. they will probably raise capital later this year or early next year on the heels of a strong period of 3-6 month
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ramping the model 3. the bears will say it is not sustainable and elon is dressing up the quarter in advance of that capital raise. there will be a lot of questions. there will be some hyperbole. that will be heavily debated. what won't be heavily debated i, if they are profitable, think they will go to the market to seek proceeds for development in china -- we haven't penciled $3-5ing in yet -- a billion process, but we haven't done any penciling in for tesla. proceeds will be tied to the model y, the crossover utility version of the model 3, which will come to market in 2020-2021 as a production vehicle.
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julie: i have an unusual question for you. is tesla tough to evaluate compared to other publicly traded companies? you have the facts before you, but so much of the investment thesis is on elon musk's punch list or in his brain. there's a lot of noise around the company, as you know. how do you go about figuring out what is realistic at tesla and what actually is going to happen? james: with most other companies, you try to get a sense of the forest for the trees and you get a better sense of the broader market. can there which are businesses businesses --e what does their growth look like overtime? you have to look at much smaller examples of victories, a victory
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to ford on a low-volume product doesn't mean the same for tesla, which is an up-and-coming manufacture. it's easier today than six years ago when we first started looking at this company. think about the last 10 years with elon's benchmarking for his own incentive compensation. quite a few items he had to get through. there are points of success you can look back on to give you a basis for expectations in the future. oftentimes, we gloss over -- the goal post is constantly shifting. i don't think that is fair in many respects. but, to answer your question more directly, i do think there is quite a bit of history now to build upon. with every win, you have to give them some benefit of the doubt
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or incremental benefit of the doubt. julie: today's announcement was one such win. james albertine, thank you. from new york, this is bloomberg. ♪
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scarlet: this is "bloomberg markets." julie: with a trade war just getting started, it's hard to say whether the trump administration's tariffs will be successful. spoke withhs francine lacqua about the global impact of president trump's policies. >> we don't really know what is coming out of this because he's making conflicts and crises that didn't exist before. rhetoric, the trade and the first steps in raising tariffs are both bizarre and they are dangerous. right now, it looks like a
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skirmish, a game, but it's not a game at all. the president is using authority recklessly. all of his steps are under the claim of national security. it's incredible that this is not scrutinized more that one person basically can make decisions like this on a vacuous claim of national security to break up the trading system and to create crises. the problem is we are putting out fires that an arsonist has looking ate are not the real problems and the real investments we need to make for the future. it is rather bizarre, but that's what he has is talking about every day. our system is not working because it is letting one person do this rather than the rule of law. >> he is still the president of the united states.
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many give him the benefit of the doubt. will this get us a better deal? many are fired up on what he's going to do. do you think he will continue this rhetoric after the election? >> it is a fantasy world. we are not doing anything other than undermining trust, undermining rule of law, undermining longer-term thinking. everyone is scurrying moment to moment to guess what will be ont of an extra nearly president -- extraordinarily odd president. this is not a case of benefit of the doubt. this is a case of every day, some kind of damage control. scarlet: that was jeff sachs. time for the bloomberg business flash. minihe first time, bmw
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cars are being manufactured in china. the german automaker agreed to a joint venture. bmw says they will make battery-powered vehicles at a new plant in china. it's the second major deal for bmw in china and part of a parade of trade accords announced this week between beijing and berlin. safety"f "margin of reportedly no longer available on kindle. the book was selling on amazon.com for $9.99. the version on amazon was published without his approval and his team is taking legal action. hardcopies are a collector item in some circles of the investment world. that is your business flash update. it -- didn't download
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julie: i'm out of luck. i will have to spend $2500 to get it. you have to wonder what happened in this particular situation. scarlet: apparently, it was a company called oceana pdf that put it on there. we will have to do some digging. julie: more to come. coming up, it once worthless commodity -- a once worthless attracting -- ♪
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>> itchy eyes, a scratchy throat, dry and dusty african air. climatethe weather and for bloomberg news in boston.
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for the atlantic storm season starting to show some sign of life, for most of june it was quiet and calm and part of that was because of a large atmospherics world all the way to the said harry -- sahara desert. it does not stop hurricanes from -- engineses or heat raised on building blocks, the desert air drives -- dries those right out and topples the bricks that could make the systems. dry air is also stable. tropical storms even little volatility. it is like adding sand to a cake recipe. keeping storms at bay is not the only thing it does in the americas. 100 million kinds of dust crosses the atlantic every year and the rain forest he and amazon crib the next time we look in the sky, we see the sun, it might he an omen of good weather on the horizon. you can follow me on twitter and get all of your news of dates that take rock.
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-- at tictoc. >> that is some of our reporting, tick tock streaming live on twitter. this is bloomberg markets and i am scarlet two. julie: i'm julie hyman. let's get to mark crumpton. mark: thank you. a san diego federal judge said he will not send the deadlines imposed for the united states to reignite -- reunite families forcibly separated while trying to enter the country illegally here less than half of the 1.2 children under the age of five who were taken on the parents were returned before today's deadline. a supreme court nominee made the holdingn capitol hill -- with senators who will have the finals day on the confirmation political battle lines already were being drawn. republicans are calling the judge qualified.
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orrin hatch longest serving member and today called the judge among the most distinguished and influential judges in the entire country. >> the supreme court has adopted lessions, his opinion, no than 11 times, supreme court has. he has offered most will dissent that has prevailed in the supreme court. >> senator hatch said president trump has made quote an excellent choice. a political watchdog group is calling for next -- and ethics review. several at the ohio state wrestling team in the late 1980's and early 1990's, say he who is a coach at the time was being abused by a team doctor. the commerce in and was unaware of the alleged abuse. theyailand, navy seals say are not sure if it is a miracle,
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science, or what, but all 12 members of the boys soccer team and their coach are out of the flooded cave where they have been trapped for 18 days. international team of divers brought out the last of them today. the leader of the rest of operation says the medic and three navy seals who stayed with the boys inside are now out of the cave as well. global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. julie: miracle signs or what, i think we're all happy they are out here desert two dollars, a seemingly worthless commodity now fetches billions. before the break, we teased you with this. they will ship 22 million tons of sand. sand is what we are talking about, to show producers. only a year ago, the price was zero. it is now $80 per ton, making
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the hall worth about $2 million. here to tell us why is bloomberg's energy order, david. an interesting story. about sand asnk being a top commodity but it has become one. what role does it play in the fracking business? >> it is hugely vital. you will not complete today without it. for a long time, it has been out of an north wisconsin. that has been the epicenter and that is the most like marbles, the harsh -- harshest strength so they could survive the rock in the ground. you always shift the sand were ever the next hot oil play was. tech's, and or soft then the downturn happened in 2014 and cost-cutting was all of a sudden the rate. avidly possibly drill oil and $50 instead of $100 and where and we had cost? time, it wasst
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considered trash and not with it to use. then they started to look at the cost of what it costs to shift -- ship things down by train. west texas. it turned up to be a gold mine for them. let's for the companies that have set up operations here in everything. about concerns of overbuilding, whether we're getting toward mobile territory here? >> yes it seems to be an interesting sort of divide. you talk about mining companies and sells, this say nothing to be concerned about right now. i was told she is not concerned in any, she is concerned about having enough for the oil companies that are demanding. if you talk to analysts and those on wall street and in esters, there is concern that if you build all that is announced west texas, eventually you have to have an oversupply which could hit in the next couple of years. it will be interesting to see if is our bills and if the demand
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does not meet all of the supply, you could have an oversupply your -- oversupply. >> i kept thinking about, is any desert now fair game, any patch of sand in the u.s. now potentially a source for fracking? >> good question. >> right. sand is not just sand, which i had to learn at your a lot of asking around. it really depends on the type of granule and what that is like. the sand you find on the beach is for the most part ground-up seashell. much more angular. when you show evident to a tiny crack, a lot of those can actually fill in and not have any gaps left over or the oil flow out of. there is a lot of sand probably not worthwhile. you have to send out geologists to test the type of sand for it to be the right kind. that is why after a lot of testing, they eventually found ok, this can be worthwhile. not compare to
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the wisconsin sand, perfectly circular. thank you so much. . dispute to story. coming up, pepsico builds profits on salt snacks as soda fizzles. more on the earnings report and share price reaction next. this is bloomberg. ♪ berg. ♪
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scarlet: this is bloomberg markets. julie: it is time for the stock of the hour with them a -- with emma. >> the etf, you can read is almost one zenit point higher. take a lookctor who
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at the s&p index, you can see consumer state's, best-performing sector of the utilities.rading we struggle to find this today. take a look over here. falling, down yesterday, we heard it was businesshe u.s. baking , for about 375 million dollars. walgreens falling after a long-term bowl on the stock or you can finally ditched his thick tactically wrong call falling, years, also compared to that today, the swarming customers about a $202 coupon, that is a scam. up and today, it jumped after reporting better
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than just the. the decline of its business for saltytrong demand snacks, that may be for optimism for the rest of corporate america, hoping as we get full on interning season that a lot of these will have been doing pretty well. coca-cola and monster beverage. the stuff of the hour, we're looking at warmer today. that is up about one point percent, and this is actually a news one of its subsidiaries announcing some new initiatives to compete in the online grocery delivery market rate here in the u k. u.s., sorry. in my mind, i was back u.k.. they have announced a return to same david -- delivery here in new york, really taking the fight to some rivals.
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groceries in everyday essentials, they will use parcel, to help it those orders to customers. new information on what this will cost estimates. -- spoke to a spokeswoman and they said they are still working out details. aat is interesting is jet was wired about two years ago and there actually see dekes falling traffic to we have a little chart that will show you the number of online visitors has been falling in the last two months and i would has a new strategy. they have been tasked with winning new york and the other big coastal cities. these americans not covered by the 90% of americans living 10 miles from his store itself. their new president were he outlined a strategy. is evolved tos
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serve customer. we know the brand resonates particularly in large areas in the u.s. that is what we have done to focus on that today. we have made the progress on the -- on that. with aght on will brands number of local grocery products. required a startup who would provide last-minute the film and services for carriers. >> that assignment outlining the new strategy. mile mentioned the last livery. that is holy grail for all of them here they have to figure that out to succeed. >> exactly. a gram how to get to customers especially in big cities do not have a front porch or anywhere that you might feel to drop off delivery but people still want either that they were the day. they are up against a number of the competitors.
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amazon andalk about certainly in the space in new york, they were willing to do this with amazon prime now. they are starting to test out having american entrepreneurs with look at -- local businesses to help them serve that. it is certainly a big topic for a number of retailers at the moment. >> to death. our bloomberg retail reporter. as she was mentioning, pepsico came out with result and it had an act on the rest of sector. strong sales of frito-lay chips helping the company overall be bottom line estimates. other sales still struggling. fred joins us now. sales in the north american business down for the with straight quarter. it is a consistent problem -- problem. >> it is people away from soda. to the senateed business, cook has been spending
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ton of advertising on customers, and pepsi is falling into the second place role and having a hard time turning the business around. thank goodness for frito-lay. >> there is a puzzle at the center of this is one of the reasons soda sales have been following is the health issue. people want me to be just flavored seltzer's for example, chipsere is no buying rodrigo spirit is not like those are super healthy. >> they are not. is an interesting dichotomy between sugar and salt and sugar is really that bogeyman and we have seen it hurts sales of candy. people deftly turning away sugary drinks. when it comes time for indulgence, people's to love doritos and she doesn't frito-lay. these are not organic chips or non-gmo chips here at they are indulgent and snappy brands that are doing really well for them here at >> you have to drink water and eat potato chips the same time. it is the classic guide: candy art. >> a really good point.
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>> what are they to do with the beverage is this? in the past, there were calls to her to spin off beverage unit, i mean, a lot of pushback from activist investors in particular to what are her options? >> that came up on the call today and she basic he said in no uncertain terms we will not sell the business, a telecast and the butot a to their standards they will fix it. they are spending more on advertising and cutting. every indication was that they would not sell it here the russian what to do with the operation is an open one. she said they are still in study mode and looking at what to do. these companies have three franchised it, taken it back, and there is a next action advantage to owning those guys and there is give and take on both sides. there is a lot of debate on what they should do. >> also the beverage business faces higher chance -- higher transportation costs, all of those things factor in to the
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falling demand. >> that is something affecting all of packaged food makers generally. thank you, greg. up, a bloomberg exclusive, you will hear from the u.s. treasury's teri jack lew. why he says there are a lot of reasons to be worried about the economy. from new york, this is bloomberg. ♪
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julie: i am julie hyman. scarlet: i am scarlet fu. continues tove flatten, which can be an indicator of recession. we spoke with jack lew in hong kong about the risk of an economic downturn. >> historically, the yield curve has been a stable predictor. it has accurately predicted almost every downturn, and i do
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not believe it has that more than one balls positive in terms of predicting a recession when there was not one. when you saw verdict yield curve, you could the people getting quite nervous now. we are in a moment where because of change policies, there will be stress on spreads and it may not be a normal time in terms of the yield curve being the latest indicator, but i do think it shows attention. it shows a lot of confidence in the long can you don't show those creep up in short-term rates are forced by changes and monetary. -- monetary policy. i think there are a lot of reasons to be nervous about the economy. we're in the ninth you're of a recovery we will probably break a record. >> is one of the longest -- >> i am proud the first seven years were on our watch. we did a lot to drive this recovery. -- goest goes on here
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on. i look at the policies being put in place and they are not friendly to continuing a long-term growth. i think trade policies are causing uncertainty that will be reflected in investment decisions and it will put a drag on the economy in terms of higher prices and less open markets. i think the tax policies while shared by the business community, it is a little bit -- there is a flare when you pour the kerosene and then it burns off your the after effect of the tax cut will be trillions of dollars of debt, trillions of dollars. and i think that will be a burden on the economy, as we are getting to the end of the economic cycle. economicf we have an downturn that we do not have the school arsenal that we should have to respond. you would want to rental government to jump in and put ine he did in 2008, 2009,
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2010, but a lot of fiscal measures into the economy and get it going. trillion indding $2 the next 10 years, it is a lot of stress. it will be a problem driving rate up and it will have a drag effect on the economy and it will be harder to respond. chinaspoke with him about passes currency potentially being used as a tool for trade war. >> it is good for china to reflect on the strength of the economy. gives more purchasing power to chinese consumers helps grow the domestic consumer sector are of the economy, which is so important to maintaining stable growth but also makes it more competitive when you compare a chinese product to one produced in the united states just for -- in europe. it reduces tension. i will not say there are problem -- are not problems.
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there are serious challenges that have to be engaged, really nice this has to engage china. when i look at the engagement today, just today, the biz -- withisit in europe, chancellor merkel, it looks like the rest of the world is getting together to say we still believe in the rules of norms that the united states designed, and the united states appears to be the outlier. it is not good and that is what worries me. i'm not worried when the united states challenges china on legitimate rounds. i am is progressive challenging china has any of my editors worker what is wrong is the united states loses it's very special role as the leader of speaking for international norms. >> that was hours as the interview with jack lew. it is time for the business flash, a snapshot of some of the biggest stories in the news today. james has made it clear he is in
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leaving soon but he may be moving preemptively on an eventual successor. senior executives around various units to broaden their teeth. promoted for all investment bankers and traders. also consider a ceo candidate, he head of the international operations. and, cohead of the investment banking unit. amazon's and cymer test center stage starting july 16 when american's biggest e-commerce company rolled out its annual prime date aired it is worse for the company since hosing it purchase of whole foods. amazon is looking to extend the loyalty of 100 million prime members to the file. it rolled up $2 billion in groceries tells last year. dirty martini lovers will have to pony up a little extra at u.s. bars or the international trade commission will impose antidumping duties up to 25.5 aftert on spanish olives
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reportedly funding on american producers are getting burned. anti-subsidy duties of 27% will also be levied. u.s. producers had demanded that be imposed or the u.s. could soon become the world's top oil producer. the energy information administration has output averaging 11.8 million barrels per day each year up from its previous 11.6 million barrel a day estimate last month. the forecast holds, the u.s. will claim the top spot. that is your business flash update. i want to talk more about olives . will greek olives be where they definitely the demand is #see. coming up, speaking of where they might come from, showdown, president trump arriving in brussels. the stage is set or a major dustup over defense spending,
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trade, and much more. and a reminder you want to check out she tv on the bloomberg. for the year, you see the back-and-forth movement of the various indexes. the dow is positive, all the indexes in the loss column for 2018. this is bloomberg. ♪
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salad: welcome to bloomberg markets.
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♪ we are live in bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and around the world. as we see a low in the trade war and ahead of earnings season. chum descends on brussels and nato allies are anxious as the president pushes for them to pay more. we live in idaho as media moguls and tech titan wheel and deal. one hour from the close of training -- trading. just going into the green. >> about an hour ago, a tiny gain and four days in a row for the nasdaq. in the last eight sessions of seven out of the eight days, investors are really looking toward earnings season confirming the -- confirming the
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gains stocks and bonds are selling off of one basis point telling us that bonds are pulling back. as for the last eight days, this is without with the exception of last tuesday where we saw a pullback, we have had seven of the eight days hire gaining 2.9% higher, since the middle of february, bouncing back from the volatility in early february, what makes it interest is it comes as the actual trade war comes up. a small trade war between the u.s. and china after a month of volatility on the rumor that is asterisk p are to be looking past it, also earnings season. at some ofa look those components. up 2.3%, good morning. the shares are undervalued and , boeingre is a yield has been volatile and investors 1.6% asoday, walmart
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they announced they will be offering same-day delivery for groceries here in new york city, and coca-cola up 1.1%. pepsicof a talent for which did kickoff its earnings season on a positive note .eaning -- beating earnings another stock that is higher, helping the nasdaq, helping that gain, all over on the day. at this point, up 1.3% on the news that the company plans to build a plant in china that has the capacity at some point to produce 500,000 cars a year. this is remarkable and a huge goal. if we happen to the bloomberg, let's put in into perspective. these are the number of cars tesla has to produce. cars perabout 25,000 quarter. about 35,000, the most recent order about 53,000, so 500,000
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cars, if and when to that happens literally right of the charts. tesla just keeps on going. >> thank you so much. let's get you to first word news with mark crumpton. mark: battle -- battle lines are being drawn as president trump us his nominee for supreme court -- conflicting views for the long time judge. >> yesterday stand, judges are for personal views or policy preferences here at >> in selecting the judge, president trump did exactly what he said he would do on the campaign trail. nominate someone who will overturn women's reproductive and strike down health care protections for millions of americans.
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mark: senator schumer says he plans to oppose the judge with everything he's got. michael flynn today made his first court appearance since leading guilty last year for lying to federal agents out russian contact. the judge asked press is to provide an update by next month. with robertperating mueller's probe and faces up to six months in jail. the wall street journal reports flynn will join a lobbying firm. laureateand -- nobel for house arrest and allowed them to seek medical care in europe. in clients since 2010 when her late husband was awarded the peace prize while in prison. he was a political dissident who called for an end to china's one-party system, western government and activists have pressured asian to release him for years.
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global news 24 hours a day on air and on tick tock on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. scarlet? scarlet: president trump just landed in brussels for a two day nato summit. in live picture of air force one, landing at brussels, belgium. it is not just because of the world cup game but following the remarks urging allies to measure gdp. to 2% let's go to alice, bloomberg flynn has team leader who joins us live from washington as air force one turns at airbase in brussels. if you look at how much the nato allies are paying when it comes to different spending, certainly, president trump has a
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point of the u.s. is way above aunt,% target 3.6 per's poland at 2%, at that target as well. certainly there are a lot of countries that have not met the target. italy at 1.1%. it is some and the president for last year at the nato summit. what has changed since then? have countries made progress? how has going to revolve to this year #>> this is something president trump us is that excessive push for as well. barack obama pushed to dispense -- defense spending tour that target. since the end of the cold war, europe has enjoyed a peace dividend, this country has cut defense spending and the u.s. really did not. we never got our peace dividend. let's give the president a little credit. donald is taking them on directly and have not diplomatically on this issue.
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and now, he is doing something that europe believes is especially him there. he is linking the european union trade deficit with the u.s. defense spending on their behalf asking why must the u.s. to -- pay so much just to have them correct trade barriers with some of our products. >> is that causing success for this argument this time around or is it a matter of the tone of the rhetoric first is what we heard from president obama for example #>> i think your intention again raising defense spending one barack obama raised this as an issue. they have continued those increase. donald trump's criticism is really directed at germany, the largest and richest in europe. i think it's still less than 1% of gdp.
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they're only protecting 1.5% by 2025. he is really targeting germany and with these remarks. and they are raising business and spending. it is happening very slowly. >> too slowly for the resident's liking your life is a myth is one, we are waiting for the president and first lady to emerge from the air after this is at the airbase where they arrived to attend a two-day nato's. -- lookg i think about back to last year, the president would not specific the endorse a defense was. he only made a verbal commitment later at a press conference. has president trump given an indication that he wants doing partnersment with nato ? >> he has not been that explicit or threatened to back away from articles i've commitment to come
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to your past defense if they do not reduce the trade deficit with the european union. those threats of not been put on the table. he is trying to little over pressure and heat on the allies this defense.h >> it seems that the discussion will dominate the meeting. are there any other issues that might coming up that other nato allies will be pushing for discussion of, besides just the payment issue? >> the rest of nato is -- nato like to talk about russia. commissioner, think that assist title. he said today the u.s. should start regarding allies as allies and said we do not have many of them's appreciate what we have got and start treating russia as nothing other than an ally here thet is not lost on all of
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nato countries that donald trump is going to the summit where he will create a lot of trouble in differentnd contributions to defense spending and from there, he will go to this am it and meet one-on-one with vladimir putin and they will probably look friendly and say nice things to each other. he will probably get along better with them some of the leaders at nato. >> he has said that, which is remarked was well. it goes back to the idea that the president at one point proposed that russia should be allowed to join nato. we had heard from the white were briefing reporters on what would be on the agenda at least for the u.s. made us on, it would be that the president was focus on russia and activities aimed at destroying to my see and yet, is it are that president trump is product nato should allow russia to be a member as well, is this something that he has actually for in any way or was it an >> i am not remark?
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sure donald trump got the memo. it is in a while since proposed running russia join nato your it was before he entered the white house, i inc.. he recently has russia should be allowed back in the group of eight industrialized nations. i do not think anyone will talk about russia joining nato particular summit. >> what are we hearing from these other countries this are? the president has very low level out as he tends to be on twitter and his other platforms. have we been hearing from other world leaders that will be there in advance of the meeting benchmark >> i think there is a fair amount of anxiety about how this will go. it was frankly pretty much a disaster after donald trump removed his signature from the joint brush up withhis
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justin trudeau. something like that could happen at the summit. i think a lot of our allies are weary of that -- wary of that. >> they are and again, he only have a look at the fact that he began meeting with vladimir putin one-on-one just days later. have we gotten any more indication, as we watch the president and the first lady exit air force one at the airbase in belgium, they are making their way down the steps, they are here to attend the nato summit in belgium, it has nothing to do with the world cup, though that game is second place, i only mention this because it is a widely watched game. france scored. r -- have we gotten any more of dates on what is on the agenda for the one-on-one with president trump and vladimir putin? >> we do not know much about what they will talk about. we have been told the president
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will raise things aggression election meddling, into the ukraine, their involvement in syria, but i want to actually andhim say he has done that hear what vladimir putin, how vladimir putin responds the president raises those issues. if he in fact raises those issues. >> all right. for bringingmuch us a preview of what we might hear from the nato meeting. we see the president and the first lady on the grounded rustles have just arrived in being greeted. let's bring in amory on the phone now in brussels. talk to us about some of the preparations and the chatter around the nato meeting as president trump arrives? yes here you know, these are historic the pre-ritual meeting but this one is going to have european leaders and allies
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really on edge. membersnding letters to of nato telling them they must with the agreement by 2024 to increase gdp. that only a few members actually hitting the target, besides the united states, greek and poland, this is really what trump wants, he has been talk about it, tweeted before we even arrive. he tweeted on air force one talking about the fact that is what he wants to get out of the meeting today hear it on top of that, he is talking about the trade war and trade tensions in and he is basically saying we are boosting spending spending in europe, but officially germany, european -- jeremy'defense
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minister recently said -- a bit of a fight. much, and were you phone with us from breast. mentioned, a little world cup update. france is up versus belgium in the world cup match going on now. coming up, tech and media moguls gather in idaho and we will look at the deals they will be discussing next. from new york, this is bloomberg. ♪
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>> the biggest chains of media and tech, our bloomberg senior
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deal reporter joins us or a remote deals report today. are the big things people will be talking about around this event? x the big things really, one really interesting aspect of that is the conference is to be somewhere were a lot of vague deals would come out and germany. this year, a lot of those deals are already in full swing, a be -- at&t and time warner, and then there is a question of who ends up buying the 21st century fox asset here we see comcast and disney in attendance both. there will be interesting conversations around that. >> traditional legates a players are there but you have a tech names as well. jeff bezos, tim cook, mark zuckerberg, what are they pushing on?
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what will be the focus for these guys? i think the keyword is convergence. we are seeing a ton of that already happening where legacy media is only legacy because tech has pushed in traditionally to what is that based. the question for a lot of those people is to they end up selling to tack and if they don't, do they have to find a way of becoming fast-growing again themselves? there is nothing good about fast growth. he will hear a lot of conversations around that. here, so i think there will be tons of speculation and they may be the kinds of deals that begin here and then we will see some actually flush out later in the year. >> who are you most excited to talk to who will be there? of thes like a who's who players in media and tech. we have a time of exciting interviews coming up in the next
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few days. we kick things off tomorrow morning with tim armstrong. he will talk about the issue of convergence right now. then we have a publicist coming in, ambassador l brands, and a personal highlight for me, sebastian is coming on to talk about flying cars. >> looking forward to that. all right. and joining us from sun valley idaho, joining -- join us for the special coverage at sun valley starting tomorrow. this is bloomberg. ♪
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julie: today, we are joined by kevin kelly. i know you have been watching some of the slow's here which will be quite interesting. in particular, what is going on with utilities.
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yesterday, a blood that in utilities. pronounce seeing that options. up and you areng also seeing a lot of their sentiment happening in the utilities space. or .8 times the amount of puts versus calls. that is understandable if you have seen utilities rise about 11% over the last month and they are safety trades. now -- but then if you flip -- conversely you go over to where all the bullish at vivid he is, where is all the financials. >> there is a little bit of a flipping here. >> that is why vix is 12.7 today. you are having the sector to virgins. >> exact. the return to the sense of will not happen
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or is it sort of a pause? >> i think investors are positioning themselves to going to earnings season in all of the -- now they are positioning themselves. financials will do well the current market and they will be selling off. especially the options market. >> moving on over here, and they're looking at a trade going to january. >> option contract, they want to actually align themselves with walmart. as well as one of the biggest leaders over in the chinese it.
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now google just got in for about $40. jd.com as -- is really seen as the walmart of china and so they have roughly $.20 of the overall retail sales. one reason why their stock has not done's at -- done as well as alibaba is a built the of logistics operations and the warehouse's vision centers, that is where a lot of companies want to focus on now in the off-line, so they can get goods and services faster to the tumor, then just streaming. if you think about what is happening, you have got a move in two different continents, the u.s. as well as europe. that is why google made this investment. go out and actually buy the 37 call in january 2020 sell it $60 all. in $40.63, the most you can win is the -- loses the
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six $.35. as a long-term trade and that is what google has been doing and it is also what walmart has an doing. they build up their advertising benefit fromd they that as well. they are the number one mobile chat program over in asia. >> ok, kevin, thank you. scarlet. scarlet coney a reminder you want to catch -- breaking news, here are the recommended videos, giving us a preview of second order bank results. this is bloomberg. ♪ retail.
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comcast business outmaneuver.
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-- says the u.s. should appreciate its friends in the region because it "does not have many". trump, -- indent europe. what you spent on defense, many times more than and china. ex-president trump says nato treats america unfairly and he tweeted this morning that he should pay more for military shouldons in the u.s. pay less. the british prime minister treason may says she is looking forward to positive discussions with mr. trump when he vision -- visit the united kingdom. in the press conference in london, theresa may said there would be a lot of issues to talk out. >> yes, we will talk about trade issues. theme when we leave european union, we will be able to negotiate

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